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Price Cap Sought For Service To Low-Income Customers, Load Currently Served By Retail Suppliers
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In comments in a PUC of Ohio rulemaking, the Ohio Consumers' Counsel recommended that the Standard Service Offer rate be used as a price cap for electric service to Percentage of Income Payment Plan (PIPP) customers
PIPP customers may not shop in Ohio.
PIPP load is currently carved out of the SSO auction, and a separate PIPP RFP is held. While the PIPP RFP is a wholesale auction (winning bidders serve PIPP load, not individual customers), the PIPP auction limits bidders to bidders which are certified as a retail supplier (CRES) in Ohio
Statute provides that a winning bid in a PIPP auction shall meet both of these requirements:
• "Reduce the cost of the percentage of income payment plan program relative to the otherwise applicable standard service offer[.]"
• "Result in the best value for persons paying the percentage of income payment plan rider"
Under current practice, an initial RFP is conducted for retail suppliers to serve PIPP load, for a defined term, at a price lower than the SSO. If no qualifying bids are received, a second RFP seeks supplies from retail suppliers to serve PIPP load at any price
In the past, PUCO has accepted PIPP rates, set by the second RFP, which have exceeded the SSO rate
The Ohio Consumers' Counsel has opposed this method of setting PIPP rates, arguing that PIPP rates which exceed the SSO rate contravene the statutory provision that the PIPP auction shall, "Reduce the cost of the percentage of income payment plan program relative to the otherwise applicable standard service offer".
PUCO has held that this statutory provision requires that PIPP rates be lower on a "long-term" basis, and not for each and every rate period
OCC said that PIPP rates set by the auction process have exceeded the SSO clearing prices by as much as 60%
OCC said that, in 2022, all electric distribution utilities' PIPP auctions produced PIPP rates higher than the SSO rate.
OCC used a current PIPP rulemaking to again seek a policy that PIPP rates shall not exceed the SSO rate
"Without a cap [on PIPP rates], neither provision of the law is satisfied and at-risk consumers may suffer," OCC said
OCC proposed that PIPP customers be charged the lower of: (1) the rate resulting from the PIPP auction, or (2) the SSO rate
To the extent the PIPP auction rate exceeds the SSO rate, OCC did not specifically propose what entity shall be responsible for serving PIPP load.
The draft rule would provide that, if no retail provider participates in either PIPP auction,
the electric distribution utility may implement contingency
measures to procure supply for the PIPP plus program load.
In separately filed comments, Constellation NewEnergy, Inc. expressed concern about proposed PUCO rule language that would require that the winning PIPP bids, "reduce the cost of the PIPP plus program relative to the SSO."
Reflecting current practice, the draft rule provides that if no CRES provider submits a bid
to serve the PIPP plus program load for less than the SSO rate, then a
supplemental RFP auction will be conducted in which CRES
providers may submit bids to serve the PIPP plus program load at
any price.
However, if PIPP prices were required to always, "reduce the cost of the PIPP plus program relative to the SSO", as stated in the draft rule, such second PIPP auction, which the draft rule expressly provides may include bids higher than the SSO, would be rendered moot (or would fail to attract any bidders whose costs exceed the SSO rate), except in cases where there is significant downward wholesale price movement between the auctions
Constellation said that, if a second PIPP auction is required due to the initial auction not securing the necessary supplies, "All winning bids will not necessarily be less than the
SSO if a supplemental auction is triggered and bidders submit bids at any price."
Constellation suggested that the draft rule be modified such that the PIPP auction shall reduce the cost of the PIPP plus program relative to the SSO, "[e]xcept as otherwise provided[.]"
Constellation said that its proposed change would, "establish a rule that
encourages participation and competitive bidding for the electric PIPP loads."
Case 25-0823-EL-ORD, Case 25-823-EL-ORD
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January 6, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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